Apple reportedly tried to partner with Facebook to get a cut of its revenue
Apple would have gotten a cut from an ad-free, paid Facebook subscription service.
Facebook and Apple have been at odds for several years now; Apple announced back at WWDC 2020 that iOS would require apps to ask users to opt-in to cross-app advertising tracking. Facebook spent much of the next months speaking out against Apple's plans and predicting revenue instability due to the upcoming changes, but the feature was released in iOS 14.5 back in April of 2021. Somewhat surprisingly, though, a new report from The Wall Street Journal claims that before this all went down, Facebook and Apple were working on a partnership and revenue-sharing agreement.
According to the Journal, Apple and Facebook were considering a a subscription service that would offer an ad-free version of the platform. And since Apple takes a cut of in-app purchases, including subscriptions, it could have been a very lucrative arrangement indeed.
Another arrangement that was discussed and ended up being a point of contention was Apple taking a cut of "boosted posts," which essentially amounts to paying to put a post in front of a larger audience. Facebook has long considered boosted posts part of its advertising portfolio; as the Journal notes, small businesses often use boosted posts to reach more people. The issue came down to Apple saying boosts should be considered in-app purchases, which would be subject to the 30 percent revenue cut that the company takes. Facebook, on the other hand, maintained that those were advertising products which aren't subject to Apple's cut.
Since rolling out its user-tracking changes in 2021, research firm Insider Intelligence claims that 37 percent of iPhone users have opted in to letting companies track their activity across apps. Since the change went into effect, Facebook (now Meta) has seen its revenue growth shrink significantly — and last quarter, Meta reported the first revenue decline in the company's history.
As these discussions reportedly took place between 2016 and 2018, we're a long way off from these talks. Apple is doing its best to position itself as a defender of privacy, and Meta... well, Meta is busy trying to make the Metaverse a thing. But for now at least, advertising is the only notable way Meta makes revenue, so the company will have to continue to adjust to a world in which iOS app tracking protection is a thing that most users take advantage of.
